BUSINESSBUSINESSMonday 8 January 2018

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Qatar stocks extend strong

new year start

Investors upbeat on Qatari economy

BofAML forecasts $10bn gross issuance by Qatar this yearSATISH KANADY

THE PENINSULA

DOHA: GCC debt will be a strong play for investors in 2018. Qatar’s gross issuance for the year 2018 is expected to hit $10bn mark. In the GCC, issu-ance will be the key investment in the near term, particularly as issuers take advantage of low longer-dated US rates with Oman recently mandating banks for a triple-tranche deal, according to Bank of America Merrill Lynch (BofAML).

Given Qatar’s $2bn Eurobond is maturing this month, the country is expected to issue more debt in 2018. “We still see value in Qatar vs. GCC peers, trading almost 60bp wide for its rating,” BofAML’s MENA Economist Jean-Michel Saliba (pictured) said yes-terday. BofAML is forecasting $8.5bn gross issuance in Oman this year, he said.

Elsewhere, BofAML is Underweight (UW) on Kuwait and Abu Dhabi; although the balance sheets of both issuers are extremely strong, particu-larly given sovereign wealth assets, valuations are tight, with the search for yield likely to benefi t higher-spread sovereigns.

The Merrill Lynch is also UW on Dubai given tight spreads relative to a high debt burden, with increased bor-rowing for projects particularly ahead of the 2020 Expo. BofAML forecasts $20bn gross issuance in Saudi Arabia this year. Saudi’s spreads are wide for the rating, but this is justi-fied given very large issuance forecasts.

“We are MW on Oman. Fur-thermore, the country will con-tinue to issue large volumes in the external market to fund the deficit. We are Overweight Bah-rain given exceptionally wide spreads for its rating and rela-tive to Saudi Arabia; we expect the country to be financially supported by the GCC if it com-mits to reforms,” Saliba said.

In Mena market, BofAML currently have a tactical recom-mendation to buy Lebanon ‘22s, taking advantage of the sharp move wider in spreads that occurred in early November; political tensions are fading and spreads remain wide vs. sim-ilar rated names such as Ukraine and Iraq for example.

Egypt’s improving credit story and ongoing IMF support has already been reflected in tighter spreads which we see as fairly-valued; we are MW. “We are also MW on Iraq as the sup-port of the IMF and interna-tional community is offset by the high reliance on oil prices and political risks”, he said.

Qatar initiates plans to accelerate growthTHE PENINSULA

DOHA: Qatar is witnessing a remarkable development towards building a fast-growing and accelerated economy. It is implementing an ambitious development program that has transformed Doha into a work-shop for a variety of projects that will make it a strong economic center in the region and the world, UK’s Secretary of State for Transport Chris Grayling (pictured) said.

In an interview with Qatar News Agency (QNA), Grayling said that he had held meetings with Qatari officials during his

current visit to Doha where he expressed the willingness of the United Kingdom to work closely with Qatar in the implementa-tion of the giant projects in the State, such as the expansion of Hamad International Airport and other infrastructure projects. Such projects represent a real opportunity to deepening the bilateral partnership between the two countries.

Secretary Grayling said that Qatar and the UK have signifi-cant partnerships in many prom-ising sectors. They also have multiple opportunities to create other areas of cooperation that will enhance the relationship

between the two countries from economic cooperation to forging a strategic partnership that paves the way to deepen defense cooperation.

He noted that Qatar has

ambitions to huge private invest-ment in infrastructure, which open the door before promising cooperation opportunities and sharing expertise to work

together to help bring that ambi-tions to reality, especially in light of Doha’s preparations to host the 2022 World Cup.

Secretary Grayling expressed readiness to work closely with Qatar to help it deliver a magnif-icent World Cup, as the Britain has got recent experience with holding the Olympic Games, and many lessons about how to make these things run smoothly.

Speaking on the cooperation between the two countries in the aviation sector, the UK Secretary of State for Transport said that he held talks during his visit to Doha on developing and pro-moting cooperation in this field,

noting the British investment that has been made already in sup-porting the development of air traffic control of air space man-agement in Qatar, where the UK has high skills in air traffic con-trol system to would help the Qatari administration develop its competence in that area. He expressed the hope that the British firms will be able to play a part in the expansion of Hamad International Airport in the same way that Qatar Investment Authority is playing a big role in the expansion of Heathrow Air-port in London.

→ Continued on page 22

Algeria’s Sonatrach to invest in Iraq oil & gas REUTERS

BAGHDAD: Algerian state energy company Sonatrach will study possible invest-ments in oil exploration and natural gas projects in Iraq, the Iraqi oil ministry said in a statement yesterday.

The statement cited com-ments by Iraqi Oil Minister Jabar Al Luaibi and Algerian Energy Minister Mustapha Guitouni, who arrived in Baghdad yesterday.

The Algerian delegation will hold meetings with Iraqi energy companies “to achieve concrete steps toward sealing a cooperation agreement with Sonatrach”, said Luaibi, mentionning spe-cifically projects to develop Iraq’s gas wealth.

Iraq continues to flare some of the gas extracted alongside crude oil at its fields because it lacks the facilities to process it into fuel for local consumption or exports.

Algeria is a main supplier of gas to Europe, exporting it by pipelines to the continent and also shipping it on tankers after liquefying the gas in special plants.

Guitouni expressed hope of strengthening cooperation in oil exploration and natural gas, the Iraqi ministry state-ment said. Iraq is the Organ-ization of the Petroleum Exporting Countries’ second-largest crude producer behind Saudi Arabia, with output of 4.4 million barrels per day. Fellow Opec member Algeria has estimated output of 1 million bpd.

He expressed willingness of UK to work closely with Qatar in the implementation of the giant projects, such as the expansion of HIA and other infrastructure projects.

8,751.20+120.53 PTS1.40%

QSE FTSE100 DOW BRENT7,724.22+28.34 PTS0.37%

25,295.87+220.74 PTS0.88% Dow & Brent before going to press

$61.44 +1.25

22 MONDAY 8 JANUARY 2018BUSINESS

France’s tallest wind turbinesThe tallest wind turbines in France which are situated above the village of Chamole some 180kms north-east of Lyon in eastern France, yesterday. Each of the six turbines is 193 metres high and rotor diameter is 115kms - collectively they are expected to produce some 18megawatts of power, enough for a settlement of approximately 12,000 people.

→ Continued from page 21 The British Secretary

praised the outcome of the Qatar-UK Business and Invest-ment Forum, which was held in London recently, in providing promising opportunities and opening up new horizons for cooperation between the two sides, noting that Qatar Invest-ment Authority has committed to invest £5bn in the UK in the coming three years.

He stressed the UK govern-ment keenness to see UK firms investing internationally and Qatari firms investing in the UK.

On the performance of Qatari economy, especially in light of the blockade imposed on Qatar, Secretary Grayling said that it has been a challeng-ing time for Qatar, however he has been impressed with what he has seen in Qatar with the economy continuing to grow and develop and be successful, stressing that the United King-dom wants to see a resolution to this dispute as soon as possi-ble, stemming from its good relations with all those involved.

Asked if the British interests in Qatar been affected by the blockade, the British minister said: “No and it should not be because Qatar is a country with which we have close friendship and I would not want to see that change by the difficult circum-stances that Qatar has been through. Actually, stand next to friends at tough times and that is what we seek to do”.

Speaking about the UK interest in reaching more trade agreements with Qatar, espe-cially after Brexit, he said that Britain has ambition to

strengthen trade ties around the world, and to continue to be a good neighbor with the Euro-pean Union and to trade with them, noting that the UK is the biggest export market, but part of the opportunity for the United Kingdom after Brexit is to strengthen trade ties and open up new trading opportunities whether it is on sector-by-sec-tor basis or in broad terms through broad ranging trade agreements. Above all, he added, the UK wants to be a much stronger investment and trad-ing partner and seeks good friends and long-standing allies like Qatar to deepen those trad-ing relationships.

On the areas of cooperation that are yet to be discovered between the two countries, the UK Secretary of State for Trans-port referred to promising sectors in the UK like the fast emerging digital economy as a great creative economy, in addi-tion to fantastic technological skills in the oil and gas sector that is very relevant in Qatar. He expressed the hope to see Brit-ish energy firms investing further in the future, especially that there is a whole range of sectors where opportunities are there for relationship to deepen.

Investors upbeat on Qatari economyMOHAMMAD SHOEB

THE PENINSULA

DOHA: The robust and vibrant Qatari economy enjoys the confidence of international investors. Despite the unjust blockade against Qatar, it continued to remain on the spotlight of global and regional investors and businesses who visited the country for boosting and expanding their relations with the tiny Gulf state.

In the year 2017 Qatar wit-nessed the visit of a large number of foreign delegations, including the official visits of several heads of states, Prime Ministers, dozens of Ministers and high level trade missions, which reflect the interests and confidence of major interna-tional investors in the fast growing Qatari economy as a result of the business-friendly climate.

Qatar Chamber (QC) in a statement yesterday said that some 52 trade delegations from across the world visited the country in 2017. QC signed 13 cooperation agreements with industry representative organ-isations and business councils from all continents during the year to open new horizons for the private sector of Qatar.

Among all the delegations, 14 were high level trade mis-sions, including those from many Arab countries.

In addition, QC, the coun-try’s oldest and largest private industry representative body, also organised nearly 200 events, including international conferences, seminars and trade events throughout the year as part of its initiatives to lead pri-vate sector efforts to break the unjust blockade against the

country. In 2017 Qatar received eight

head of states� three Prime Min-isters and dozens of ministers and senior government and pri-vate officials, who met with Qatari leaders and top businessmen.

QC was also instrumental in launching host of key initiatives such as exhibitions, dozens of training courses and arbitration programmes for the private sec-tor throughout the year to enhance the role of small and mid-sized enterprises (SMEs) and budding entrepreneurs in boosting ‘National Products’ aiming to achieve self-suffi-ciency and economic diversification as part of the long term strategy.

It also launched important initiatives and participated in other economic activities to develop the services it provided to QC members as part of its piv-otal role in contributing to enhance business-friendly envi-ronment and competitiveness in Qatar.

Qatar Chamber also played key role in introducing Qatar to the rest of the world as one of the best investment destinations, given the country’s strategic geographical locat ion,

state-of-the-art infrastructure and economic reforms intro-duced over the period and the overall development witnessed by the country.

The Chamber succeeded in highlighting the role of the pri-vate sector in the economic development of the country, and also played a critical role in overcoming the challenges cre-ated by the abrupt siege imposed by some of Qatar’s neighbouring countries on June 5, 2017, which further strengthen Qatar’s goal to achieve self-sufficiency and economic diversification

Under the guidance of Sheikh Khalifa bin Jassim bin Mohammed Al Thani, Chairman of QC, the Chamber also strengthened relations of coop-eration and coordination with all concerned Ministries and authorities in the country, which played a major role in achiev-ing the aspirations and hopes of its employees.

Sheikh Khalifa, who is also the Chairman of the Board of Directors of the International Chamber of Commerce (ICC)-Qatar, was awarded a global honour for the strenuous efforts and outstanding role in facili-tating international trade.

QC signed 13 agreements with in-dustry representative organisations and busi-ness councils from all continents during the year to open new ho-rizons for the private sector of Qatar.

Some 52 trade delegations from

across the world visited Qatar in 2017

Qatar initiates plans to accelerate growth

China’s foreign reserves extend rising streakBLOOMBERG

BEIJING: China’s foreign-exchange reserves posted an 11th straight monthly increase, capping a year of recovery amid tighter capital controls, a stronger yuan and resilient economic growth.

The reserves climbed $20.7bn to $3.14trillion in December, according to a People’s Bank of China state-ment yesterday, compared with a $3.13trillion median estimate in a Bloomberg survey.

The world’s largest for-eign currency stockpile has been steadily rebounding since January, when it fell below $3 trillion for the first

time in five years after the central bank propped up the yuan. The currency has come roaring back with authorities keeping a tight grip on money flowing out of the country and full-year economic growth set to pick up.

Still, the prospect of higher US interest rates and the reset of a $50,000 cap on how much foreign currency individuals can convert each year still could aggravate cap-ital outflows.

The yuan strengthened 6.8 percent against the green-back last year. The US currency weakened 8.5 per-cent versus leading peers, according to the Bloomberg Dollar Spot Index.

Former WTO, Goldman & BP chief Peter Sutherland dies

REUTERS

DUBLIN: Former World Trade Organization director general Peter Sutherland (pictured), who was also a long-serving chairman of oil giant BP and the overseas arm of Goldman Sachs, died yesterday aged 71.

The barrister, who also served as Ireland’s youngest attorney general and then youngest European Union commissioner during the 1980s, had been ill for some time, Irish broadcaster RTE reported, citing a statement from his family.

“Peter Sutherland was a statesman in every sense of the word; an Irishman, a committed European and a proud internationalist,” Irish Prime Minister Leo Varadkar said in a statement.

“He had a passion for public affairs and made a sig-nificant contribution to Ireland, Europe and the world over a number of decades.”

Born in Dublin in 1946, Sutherland was appointed, at the age of 35, as the state’s most senior lawyer after lit-tle more than a decade at the bar. Four years later he was nominated as Ireland’s EU commissioner.

Praising his international contribution to business, pol-itics and human rights, European Commission Pres-ident Jean-Claude Juncker on Sunday described Sutherland as “a giant of Irish, European and international public life”.

Sutherland returned from Brussels briefly in 1989 and after a stint as chairman of Allied Irish Banks he became the WTO’s first chief in 1995, having previously been head of its precursor, the General Agreement on Tariffs and Trade (GATT). While spear-heading the WTO, Sutherland took up his roles at Goldman Sachs and BP. He was the oil major’s longest-serving chairman, from 1997 to 2009, and held that role even longer at Goldman Sachs Interna-tional, retiring in 2015 after 20 years in the job.

Automobiles set to dominate annual CES at Las VegasBLOOMBERG

SAN FRANCISCO: Automobiles are again expected to dominate the annual CES technology gath-ering in Las Vegas that kicks off tomorrow.

Electric and driverless car technologies, together with info-tainment innovations, will be a focus at the show, according to analysts. Other technologies likely to be in the spotlight include the latest offerings in artificial intelligence, virtual assistants, connected home products, OLED televisions and high-end personal computers.

Auto technologies are expected to remain the key theme at CES as the presence of automakers and auto equipment suppliers has steadily increased over the past several years, MKM Partners analyst Ruben Roy said. Self-driving cars and related demonstrations are likely to remain at the forefront, but also expect a bigger turnout of elec-tric vehicles as well as infotainment products. Investors will likely stay focused on Nvidia Corp, Maxim Integrated Products Inc and ON Semiconductor Corp.Greater visibility into products and strategies for Maxim and ON could be modest positive cata-lyst for shares; ON is expected to showcase its auto image sensing applications platform

All major original equipment manufacturers are expected to showcase technologies along with a number of tier-1 suppli-ers, KeyBanc analysts said; many of these companies will make “meaningful” product, and maybe partnership, announce-ments. Suppliers and OEMs that should benefit from the trend of rising capital commitments to

technologies enabling autono-mous driving, electrification and fuel efficiency include Autoliv Inc., Aptiv Plc, Ford Motor Co., Gentex Corp. and Magna Inter-national Inc.

Stocks most likely to respond to CES-related events should be Ambarella Inc. and Nvidia, Mor-gan Stanley analysts led by Joseph Moore and Craig Hetten-bach said. Ambarella should demonstrate its assisted car based on the company’s compu-ter vision technology; it’s probably too early to hear about specific auto customer relation-ships, but that could occur as soon as Ambarella’s analyst day in MarchNvidia is “at the center” of many of the key innovations in consumer electronics.

Autonomous vehicle solu-tions likely to remain the focal point of the show, Goldman Sachs analysts said Key technol-ogies to look for include developments in AI/software algorithms that could help drive “validation” and hardware addressing auto market hurdles like Lidar miniaturization and cost reduction or camera-only based vision systems; also, elec-tric vehicle propulsion as OEMs evaluate electrified powertrains to support autonomous vehicles

New to CES this year will be an AI marketplace featuring innovations in technologies like big data analytics, speech recog-nition and machine vision, MKM’s Roy said. While Nvidia will probably remain at the top of investors’ minds when think-ing about AI, Intel will probably feature recent advances in the field at the event and in CEO Brian Krzanich’s keynote speech Micron Technology Inc. is also

likely to focus on AI as one of the drivers behind increasing mem-ory requirements in cloud- and high-performance computing applications

Look for updates from Nvidia regarding progress of Drive PX Pegasus platform, clarity on how the company plans to cut oper-ating temperature and power consumption, and new partner-ships and potent ia l end-customers, KeyBanc ana-lysts saidIntel will probably demonstrate the ubiquity of its end-to-end ASIC portfolio that spans from Internet of Things to data center and automotive

Updates on Intel’s long-term approach to the the AR/VR eco-system are of interest given the company’s recent move to wind down its headset reference design, MKM’s Roy said. Nvidia is also expected to highlight its emerging AR/VR technologies

Companies will probably showcase mobile-based aug-mented-reality applications, Bloomberg Intelligence analysts Jitendra Waral and Sean Hand-rahan said. AR hardware prototypes are bound to be shown by larger companies and startups, but the hardware may still be years away as a supply chain and standards are still missing; until then, mobile AR will be at the forefront and CES may preview some of the ways that companies leverage AR to differentiate their productsMore extensive voice-based content consumption and device control is likely to be shown; the trend is likely to see accelerated adop-tion in devices as it rapidly becomes the primary mode of input and interaction; Google Assistant is likely to play catch-up to Amazon Alexa in 2018

Qatar Investment Authority has committed to invest £5bn in the UK in the coming three years.

Qatar stocks extend strong new year startSATISH KANADY

THE PENINSULA

DOHA: Qatar stocks extended its new year’s best start yesterday further pushing the benchmark index up 1.40 percent to 8,751.20 points. The market outperformed its regional peers on the back of bluechips.

Yesterday’s rally was driven by remarkable gains in the real estate, mainly powered by Barwa and Ezdan. Barwa advanced 2.89 percent as Ezdan added 2.54 per-cent. UDC edged up 1.09 percent. The sector was up by 2.41 percent.

Among the banking stocks, Masraf Al Rayan was the topper. The Islamic lender surged 4.3 percent. Banking major QNB added 0.63 percent as Commer-cial Bank and Doha bank advanced 2.87 percent and 2.74 percent, respectively.

Insurance was the lone sector that ended in red, losing 1.13 percent after Doha Insurance

Group dropped 3.3 percent.Local retail investors were

the net buyers ahead of the div-idend season. “Qatari companies, which traditionally pay high div-idend yields, are due to announce fourth-quarter or annual divi-dends in the next few weeks, and yields may be boosted this year by the fact that stock prices have been pushed lower by the eco-nomic embargo imposed by four Arab states on Qatar”, according to a Reuters report.

“A number of stocks look set to continue the rally during 2018,

especially as some now have more than 6 percent dividend yield”, Akber Khan, Senior Director-Asset Management Group, Al Rayan Investment told The Peninsula last week.

Backed by strong oil and optimism on Qatar’s 2018 growth budget, Qatar ended the first week of the new on a strong note. Oil prices marked a new high in the new year, since Sep-tember 2015, recording $67.62 per barrel on Friday. High sen-timents coupled with hopes for a better year will be driving

markets’ activities in the coming period, analysts at Al Masah Cap-ital said.

With oil market fundamen-tals increasingly supportive of elevated oil prices – winter crude demand appears robust, supplies are being trimmed by Opec and crude stockpiles are drawing

down investors are appearing increasingly bullish. Globally, net long positions have reached a record. According to analysts, Qatar’s strong third quarter growth was a surprise for inves-tors. “Qatari GDP surprised to the upside in 3Q17, suggesting that the diplomatic dispute had a less

severe initial impact on activity than previously feared…. GDP growth rebounded to 1.9 percent year-on-year from 0.3 percent in Q2, despite being the first full quarter of the diplomatic dispute that began in early June,” NBK noted in its latest country report on Qatar.

Yesterday’s rally was driven by remarkable gains in the real es-tate, mainly powered by Barwa and Ezdan. Barwa advanced 2.89% as Ezdan added 2.54%. UDC edged up 1.09%.

Real estate sector was

up by 2.41%

US trade gap widens in November to $50.5 bn AFP

WASHINGTON: US exports increased in November to their highest level on record, but imports rose faster, pushing the trade gap to its widest in nearly five years, according to data released Friday.

The monthly trade report was full of records that signal the recovery in the US and world econo-mies, but the growing US deficit could still subtract from GDP growth in the final three months of the year.

Rising oil prices accounted for a big chunk of the increase in the trade def-icit, which rose $1.6bn to $50.5bn compared to October, the Commerce Department reported. The consensus forecast among economists was for the def-icit to decline to $47.9bn.

Exports of US goods and services jumped $4.4bn to $200.2bn, the most ever measured, pushed by a record $65.7bn in services exports, according to the report.

But imports surged $6bn to $250.7bn, also the highest ever.

The gain was led by oil imports which jumped $1.4 bn to nearly $17bn, as the average price for crude rose to $50.10 a barrel, the highest since July 2015.

For the January-November period the US trade deficit increased by $53.4bn or 11.6 percent over the same period of 2016, to $513.6bn.

The deficit in goods with China rose to its highest level in two years to $35.4bn, and for the year-to-date was $344.4bn, $25bn higher than in the comparable period of 2016.

The gap with Canada and Mexico also widened in the January-November period, to $15.3bn and $65.7bn spectivelypercent rates suggested by the regional and sometimes secessionist Northern League was not sustainable, while Berlusconi’s 20 per-cent suggestion was “less unsustainable.”

“I would explore a tax reform that would simplify the tax rates reducing them to one or, better, two. But we should avoid benefitting dis-proportionately higher income earners.”

Japan welcomes bitcoin & other cryptocurrencies AFP

TOKYO: Known as “Miss Bitcoin” on Japanese social media, Mai Fujimoto says she invests all of her savings in the virtual currency that has proved a huge hit in Japan.

“I convert all my disposable income into cryptocurrency,” the 32-year-old tells AFP. “I’ve been doing this for nearly a year now. I convert all my savings into cryptocurrency instead of putting them in a bank.”

She is not alone in her enthusiasm.

Bitcoin is recognised as legal tender in the world’s third-big-gest economy and nearly one third of global bitcoin transac-tions in December were denom-inated in yen, according to spe-cialised website jpbitcoin.com.

This has led to many analysts speculating that the famous Mrs Watanabe -- shorthand for Jap-anese individual foreign exchange investors -- is behind the recent volatile frenzy that pushed the price of bitcoin up to nearly $20,000 before dropping back.

Firstly, unlike regional rivals China and South Korea, whose regulators have clamped down hard on the crypto-currency, Japan has welcomed it with open arms.

In April, Japan passed a law recognising bitcoin and other virtual currencies as legal tender -- while also stressing the need for transparency and financial stability.

And there is little doubt that Japan’s global weight grew after China closed down bitcoin trading platforms last year.

Some well-known Japanese businesses have started accepting payment in bitcoin and one firm made waves when it said it would pay part of its employees’ salaries in the cur-rency if they wish.

“The involvement of big companies, the sense of security derived from government approval and media exposure really brought in a whole new group of people to the market,” said Koji Higashi, a well-known commentator on the crypto-business in Japan.

Another factor contributing to a bitcoin boom in Japan: ultra-low interest rates from the defla-tion-battling central bank that has left investors scratching their heads for places to find returns on their cash.

While Japanese are gener-ally considered risk-averse investors, they are also well-versed in the complexities of market trading, especially in for-eign exchange.

A lot of ordinary Japanese people are trading “high levels” of money on the foreign exchange markets, said Yuzo Kano, founder and chief execu-tive of bitFlyer, Japan’s main bit-coin trading platform.

A lot of these stay-at-home FX day traders -- the mythical Mrs Watanabe -- are now turning their hand to bitcoin, noted analysts from Deutsche Bank in a recent report.

Analyst Higashi, on the other hand, thinks that the blanket domestic and international media coverage of the rise of bitcoin has prompted many Jap-anese to join the party.

“’Everyone else is doing it now and I heard they are making a lot of money. I have to get on it now.’ That’s a very Japanese way of thinking,” he told AFP.

“To be honest, I am not sure if people are buying into bitcoin

based on rational decision-making. It feels more of a short-term irrational mania to me,” he added.

Whatever the reason, “Miss Bitcoin” has been a convert since 2012.

“At the time, I was working with children and creating an online donation platform. And for the first time, I learned how expensive it is to send money abroad,” Fujimoto recalled.

“So, I was really impressed when I heard that I don’t have to go through banks if I use bit-coin payment,” added the businesswoman.

She snapped up her first bit-coin for 1,200 yen ($10) in 2012. On Sunday it was trading at $16,726.

But the cryptocurrency mania has not been all plain sailing in Japan.

In 2014, Tokyo-based exchange platform MtGox filed for bankruptcy, with French CEO Mark Karpeles saying it had lost nearly half a billion dollars’ worth of the digital currency in a possible theft.

And another factor may end up cooling the enthusiasm of individual investors -- profits made from bitcoin trading are considered as “miscellaneous income” and subject to a higher tax rate of 55 percent.

“Now, a lot of traders are struggling to calculate the amount to be taxed and I think there will be a lot of tax evasion scandals in the near future,” said Higashi.

A man walks past a poster that informs customers that bitcoin can be used in this shop in Tokyo, Japan, yesterday.

ECB should fix date to end bond purchasesREUTERS

BARCELONA: The European Central Bank should set a date to end its asset-buying program, the head of Germany’s Bundes-bank, Jens Weidmann, told Spanish newspaper El Mundo.

Tipped as a potential candi-date to succeed ECB President Mario Draghi when his term expires at the end of October 2019, Weidmann is a vocal critic of the bank’s quantitative easing program.

”The prospects for the evo-lution of prices correspond to a return of inflation to a level suf-ficient to maintain the stability of prices.

For this reason, in my opinion, it would be justifiable to put a clear end to the buying of debt bonds by establishing a concrete date (for ending the program),” Weidmann said in an interview with El Mundo pub-lished on Sunday.

The ECB has pledged to con-tinue buying bonds at least until

September. But with economic growth in the euro zone on its best run in a decade and infla-tion comfortably above 1 per-cent, it is widely expected to wind down the program thereafter.

Weidmann also called for banks to reduce non-performing loans, saying that these bad

assets were impeding plans to establish a bloc-wide deposit insurance program, known as the European deposit insurance scheme (EDIS).

“(The EDIS) could help to strengthen financial security in the euro zone. This without doubt would be a good thing. The problem is, however, many

banks carry substantial amounts of bad debt.”

The creation of a joint deposit insurance program has long been a key goal of the ECB but has faced opposition from Germany, where the govern-ment fears having to foot the bill for banks in countries that are burdened with high levels of non-performing loans (NPLs).

Regarding the upcoming election of new leadership of the ECB, Weidmann said nationality of candidates should not be a key concern, heading off concerns voiced last year by Italian PM Enrico Letta about a German taking the role.

Spain Economy Minister Luis de Guindos recently suggested the ECB’s vice-president posi-tion, currently held by Vitor Con-stancio who has until May 1 to stand down, will probably go to a Spanish candidate.

Spain has not held a position on the ECB’s executive board since 2012 after the exit of Jose Manuel Gonzalez Paramo.

German Bundesbank President Jens Weidmann (right) and former German Finance Minister Wolfgang Schaeuble, are seen in this file picture.

Vodafone Qatar changes board of directors meeting dateTHE PENINSULA

DOHA: Vodafone Qatar P.Q.S.C. (“Vodafone Qatar” or the “Company”) announced that the date of its Board of Directors meeting originally scheduled for Thursday, 18 January 2018 has been changed to Tuesday, 16 January 2018. The Board will discuss various business related items and will issue a trading update for the 9-month period ending 31 December 2017, following the conclusion of the Board of Directors meeting.

The trading update will be made publicly available on Vodafone Qatar’s website at www.vodafone.qa and on the Qatar Stock Exchange web-site www.qe.com.qa.

23MONDAY 8 JANUARY 2018 BUSINESS

24 MONDAY 8 JANUARY 2018BUSINESS

CES 2018 kicks off tomorrowTechnicians work on a Hey Google booth in front of the Las Vegas Convention Center in preparation for the 2018 CES in Las Vegas, Nevada, US. CES, the world’s largest annual consumer technology trade show, runs from January 9-12 and features about 3,900 exhibitors showing off their latest products and services to more than 170,000 attendees.

China’s Wanda mulls sports unit IPO & sale of overseas assetsREUTERS

HONG KONG: China’s Dalian Wanda Group is considering a Hong Kong listing for its sports assets as part of efforts to ration-alise its portfolio that could also include other sales, according to five people familiar with the situation.

The conglomerate last month tapped investment banks for a potential initial public offering of its sports businesses, three of the sources said. Citic Securities, China’s largest bro-kerage, is one of the banks involved, added one of them.

A spokesman for Citic Secu-rities declined to comment.

Wanda’s businesses range from real estate to football and cinemas but it has been rattled in the past year by a govern-ment-led crackdown on overseas deals and high

leverage. The company is owned by Wang Jianlin, one of China’s richest men.

An IPO of Wanda’s sports assets would include Infront Sports & Media AG, a Swiss sports marketing company and World Triathlon Corp, the organiser and promoter of the Ironman race, according to three of the people.

The two were acquired in 2015 for $1.2bn and $650m

respectively.The share offering would

also include Wanda’s smaller sports assets in China, such as cycling and basketball leagues, one of them said. The public float would not involve Wan-da’s 20 percent stake in the Spanish football club Atletico Madrid, valued at ¤67m after a recent capital raise, the source said.

The IPO would most likely

take place in Hong Kong, but bankers have also pitched for a US listing, according to the people.

Wanda is separately look-ing to sell Sunseeker International, a British yacht maker it bought in 2013 for $495m, two other sources said, but this was denied in a subse-quent statement on Friday from Sunseeker’s CEO Phil Popham.

Popham said the company had under Wanda’s ownership turned around to record a profit of £6m ($8.1m) in 2016 from losses of more than £30m pre-viously. The figures are on an earnings before interest, tax, depreciation and amortization (EBITDA) basis.

He said Wanda remained totally committed to supporting Sunseeker’s future growth but that discussions are taking place with appropriate strategic

partners that could assist with the company’s future develop-ment objectives.

Wanda declined to com-ment. The sources for this story could not be named as the plans are confidential.

Wanda’s interest in prop-erty, sports and entertainment - accounting for more than $13 billion of its deals in the past five years - ran into official opposi-tion last year when Beijing labelled overseas deals in those areas “irrational”.

In addition to sports, its holdings also include the cin-ema chain AMC Entertainment Holdings and movie studio Leg-endary Entertainment.

The company is also consid-ering the merits of a pre-IPO funding round for the sports unit, according to one of the people. All plans are still at an early stage however as Wanda

is seeking a chief financial officer for the sports business to lead the fundraising efforts, said another of the people.

Property forms the basis of the Wanda empire - its mixed use Wanda Plaza developments are common across China - but this too has put pressure on Wang’s business.

Last year, Chinese regula-tors told banks to stop providing funding for several of its over-seas acquisitions as Beijing looks to curb the conglomerate’s off-shore buying spree.

Shortly after, Wanda sold a portfolio of hotels and tourism assets, including 13 theme parks, for $9bn to Guangzhou R&F Properties and Sunac China. Five flagship overseas develop-ments - in London, Chicago, Los Angeles, Sydney and Australia’s Gold Coast - are also available for sale, according to one source.

Fed should hike rate thrice in 2018: WilliamsREUTERS

PHILADELPHIA: The Federal Reserve should raise interest rates three times this year given the already strong economy will get a boost from tax cuts, and can tighten more or less aggres-sively if needed, a key US rate-setter said.

In an interview, on Saturday, San Francisco Fed President John Williams (pictured) painted a benign picture of the world’s largest economy oper-ating at or near its full capacity over the next few years.

While his colleagues at the US central bank see unemploy-ment dipping only slightly from 4.1 percent currently, Williams predicted it would fall to 3.7 per-cent this year without any risk of a worrisome jump in inflation.

The comments from Wil-liams, a veteran policymaker at

a time of an unprecedented leadership overhaul at the Fed, suggest the central bank remains confident in its approach after a year of grad-ual tightening even in the face of the $1.5trillion tax-cut bill passed last month.

“We’re in a pretty good sit-uation: the economy is doing great, everyone expects us to raise rates gradually ... and if the data change we can respond to that,” said Williams, who has a vote on policy this year under a rotation.

“I‘m not worried about infla-tion suddenly taking off,” he told Reuters over lunch during an American Economic Association conference in Philadelphia. “Something like three rate hikes makes sense to me” this year, he added.

The US central bank hiked rates three times in 2017 in response to robust growth and falling unemployment, despite

sagging inflation which has fallen short of a 2 percent goal for more than five years.

Median forecasts from Fed officials see three more hikes in 2018 as the tax stimulus, includ-ing cuts for corporations and individuals, seep into the economy.

The Trump administration argues the tax cuts will boost both business and consumer spending. But the individual income tax cuts are skewed toward higher-income house-holds, which economists say have a low propensity to con-sume more as taxes fall.

Many economists also believe companies will use much of the windfall on stock buybacks and debt reduction r a t h e r t h a n c a p i t a l expenditure.

Williams said the cuts should have a “modest, positive effect” on economic growth over the next three years due to con-sumer spending and business investment. He expects gross domestic product growth of 2.5 percent in 2018, in line with overall Fed estimates, as well as a modest boost to the labor force and productivity, which has been surprisingly weak through the recovery from recession.

The US economy will be “in a very positive place two years from now: I think we’ll be at 2 percent inflation and around 4 percent unemployment,” Wil-liams said.

France’s Vinci lands 25-year Belgrade airport concessionAFP

BELGRADE: French construc-tion group Vinci Airports has been awarded a ¤1.5bn ($1.8bn) 25-year concession to run Belgrade airport, Serbian Prime Minister Ana Brnabic said on Saturday.

“The best offer was that of the French company Vinci ... based on financial, technical and legal criteria,” Brnabic said.

“In total, across the 25-year concession, (the deal) will amount to close to ¤1.5bn in

revenue, with finance and investment,” Brnabic said after Vinci saw off four rival bids.

Serbian president Ale-ksandar Vucic said Vinci offered ¤501m upfront, plus an addi-tional ¤732m in investment.

Vucic said the firm would also pay the Serbian state between ¤4.3m and ¤16m in annual concessionary fees. Bel-grade has high hopes for the airport, the Balkan region’s largest, as it seeks to become a regional hub with national flag carrier Air Serbia.

AIIB may launch US dollar bond by end-JuneREUTERS

BEIJING: The China-backed Asian Infrastructure Invest-ment Bank (AIIB) may issue its first US dollar-denomi-nated bond by the end of June this year, according to a state media report yesterday citing the bank’s treasurer Soren Elbech.

The earliest issuance win-dow will be “toward the end of the first half of 2018,” to allow time for certain proce-dures, including the board of governors’ approval of AIIB’s 2017 financial statements as well as borrowing and swap documentation, Xinhua said citing a statement from Elbech.

Elbech said the minimum size of the bond would be $1bn, but as demand for the first bond issue from AIIB may be strong, “we anticipate hav-ing to issue a larger size.”

In terms of bond’s matu-rity, Elbech said the choice would be between three and five years depending on investor demand at the time, Xinhua said.

He said the bank planned to cap its total borrowing vol-ume at $3bn in 2018.

In November, AIIB Vice President Thierry de Longue-mar told Reuters the inaugural US dollar bond would likely be launched in Europe sometime in 2018.

The AIIB, which has 80 member countries, was set up by China as its answer to the World Bank to help meet the estimated $26 trillion need for infrastructure spending in Asia through 2030.

Takata recalls another 3.3 million air bags under US orderBLOOMBERG

SOUTHFIELD: Takata Corp, the parts supplier that filed for bankruptcy after sparking the largest auto recall in history, called back 3.3 million air bags as part of a US order that scheduled repairs of the potentially deadly devices over several years.

The supplier identified at least 15 automakers that pur-chased the air bags, including Toyota Motor Corp, Honda Motor Co, General Motors Co, BMW AG and Tesla Inc.

Takata said it will work with the companies to develop a remedy for each of their vehicles, and urge consumers to get their air bags replaced.

Defective Takata inflators can explode in a crash and spray vehicle occupants with metal shards.

The parts have been linked

to 13 deaths in the US and hun-dreds of injuries, and mounting liabilities from the recalls pushed Takata to file for bankruptcy in June.

Key Safety Systems Inc., a supplier owned by China’s Ningbo Joyson Electronic Corp, plans to acquire the company.

Almost two-thirds of the 31.5 million US vehicles con-taining defective air-bag inflators made by Takata remain unrepaired as of mid-September, according to a November report released by the independent monitor overseeing the recalls.

About 65 million inflators are set to be recalled by the end of 2018 under a National Highway Traffic Safety Administration plan to replace the parts in phases, schedul-ing the riskiest parts for repair first.

Tesla again delays target for ramping up Model 3 output

Median forecasts from Fed officials see three more hikes in 2018 as the tax stimulus, including cuts for corporations and individuals, seep into the economy.

AFP

NEW YORK: Tesla Motors on pushed back the time-frame for ramping up production of the closely-watched Model 3 vehi-cle, its sedan aimed at the middle market.

The electric carmaker said it now expects to hit a Model 3 production level of 5,000 per

week by the end of the second quarter instead of at the end of the first quarter.

The first-quarter target was itself a prolongation of an ear-lier plan to reach this output by the end of 2017. “During Q4, we made major progress address-ing Model 3 production bottlenecks, with our produc-tion rate increasing significantly

towards the end of the quarter,” the company said in a securities filing. “In the last seven work-ing days of the quarter, we made 793 Model 3’s, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3’s per week,” the company added.

“We expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles. We intend to achieve the 5,000 per week milestone by the end of Q2.”

Tesla, which is led by Elon Musk, said its overall vehicles came in at 29,870 in the fourth quarter and included all-time peaks for the Model S and Model X deliveries. However, Tesla has been under pressure to ramp up production of the Model 3, which at $35,000 could appeal to a broad market and is around half the cost of its other cars.

A Tesla Model S car is seen in a showroom in Santa Monica, California, in this file picture.

25MONDAY 8 JANUARY 2018 BUSINESS

Europe casts a wary eye on Silk Road plansAFP

PARIS: Depending on who you ask in Europe, China’s colossal East-West infrastructure programme is either an oppor-tunity or a threat -- and when French President Emmanuel Macron visits next week, Beijing will be watching to see how keen he is to jump on board.

Since China launched the New Silk Road plan in 2013, the hugely ambitious initiative to connect Asia and Europe by road, rail and sea has elicited both enormous interest and consid-erable anxiety.

“It’s the most important issue in international relations for the years to come, and will be the most important point during Emmanuel Macron’s visit,” said Barthelemy Courmont, a China expert at French think-tank Iris.

The $1 trillion project is billed as a modern revival of the ancient Silk Road that once car-ried fabric, spices, and a wealth of other goods in both

directions.Known in China as “One Belt

One Road”, the plans would see gleaming new road and rail net-works built through Central Asia and beyond, and new maritime routes stretching through the Indian Ocean and Red Sea.

Beijing would develop roads, ports and rail lines through 65 countries representing an esti-mate 60 percent of the world’s population and a third of its eco-nomic output.

Macron, who heads to China for a three-day state visit is

accompanied by some 50 com-pany chiefs keen to do business with the Asian powerhouse.

So far France has been cau-tious on the Silk Road plan, but Courmont said Chinese leaders were “waiting for a clear posi-tion” from Macron at a time when they view the young leader as an “engine” for growth in Europe.

“If Macron takes a decision on how to tackle the Chinese ini-tiative, all of Europe will follow,” Courmont predicted.

But , as Courmont

acknowledges, Europe is divided on what to make of China’s ambitions.

The continent could poten-tially benefit handsomely from increased trade over the coming decades, but in some corners there is suspicion that it masks an attempted Beijing influence grab.

“They are notably asking themselves about the geopolit-ical consequences of this project in the long-term,” Alice Ekman, who covers China at the French Institute of International Rela-tions, said of France and Germany.

In Central and Eastern Europe the programme has been met with altogether more enthu-siasm, given the huge infrastruc-ture investment that China could bring to the poorer end of the continent.

“Some consider the awak-ening of China and Asia as a threat,” Hungary’s Prime Min-ister Viktor Orban told a summit in Budapest in November which

gathered China with 16 Central and Eastern European countries.

“For us, it’s a huge opportu-nity,” he said, with Beijing using the summit to announce ¤3bn of investment in projects including a Belgrade-Budapest railway line.

Bogdan Goralczyk, director of the Centre for Europe at the University of Warsaw, noted there were divisions even within eastern Europe, with Poland hes-itant due to its right-wing gov-ernment’s “strong anti-commu-nist stance”.

Others to the west have made little effort to hide their concern. Former Danish premier Anders Fogh Rasmussen fretted in a column for Germany’s Zeit newspaper that “Europe will wake up only when it’s too late, and when swathes of central and eastern Europe’s infrastructure are dependent on China.”

The former NATO chief noted that Greece -- a major recipient of Chinese largesse -- had in June

blocked an EU declaration con-demning Chinese rights abuses.

It came just months after Athens’ Piraeus port, one of the biggest in the world, passed under Chinese control.

Germany, Europe’s biggest economy, is favourable to Chi-nese investment, but has reservations.

“If we do not develop a strategy in the face of China, it will succeed in dividing Europe,” Foreign Minister Sigmar Gabriel warned in August.

France is meanwhile seeking to “rebalance” relations with China during Macron’s trip, according to his office -- eyeing a trade deficit of ¤30bn, its big-gest with any partner.

“Our Chinese partners would prefer a win-win situation. Why not? On the condition that it’s not the same party that wins twice,” French Foreign Minister Jean-Yves Le Drian said. “We should establish a partnership based on reciprocity when it comes to the opening of markets.”

Beijing would devel-op roads, ports and rail lines through 65 countries represent-ing an estimate 60 percent of the world’s population and a third of its economic output.

The $1trn project is

billed as a modern

revival of the ancient

Silk Road

France plans privatisation law in asset sale pushREUTERS

PARIS: The French govern-ment is planning a privatisa-tion bill as part of its program of asset sales, Prime Minister Edouard Philippe (pictured) said in an interview, confirming that the state could cede control of some companies.

The government outlined last year plans to sell stakes in order to finance a ¤10bn ($12.0bn) innovation fund.

It has since reduced its minority stakes in energy group Engie and car maker Renault, and there has been speculation that Paris airport operator ADP and national lottery firm Francaise des Jeux are in line to be privatised.

“There have already been some (asset sales) and there will be more,” Philippe said in an interview with Sunday paper JDD.

Asked if the government would present a privatisation bill, a necessary step for ceding state control, he said:

“Yes. The question is not taboo.”

He declined to indicate the timetable for asset sales and did not mention any companies.

Last month, Finance Min-ister Bruno Le Maire said the government would detail its asset sale programme in early 2018, while the head of APE, which manages the state’s corporate holdings, said the government had yet to make any decision over whether to privatise ADP.

Abe urges central bank to keep up effortsREUTERS

TOKYO: Japanese Prime Minister Shinzo Abe yesterday called on central bank governor Haruhiko Kuroda to keep up efforts to reflate the economy, but added he was undecided on whether to reappoint Kuroda for another five-year term.

Kuroda was handpicked by Abe to take the helm of the central bank in 2013 to deploy a massive stimulus pro-gramme - part of the pre-mier’s “Abenomics” refla-tionary policies - that helped boost growth but failed to drive up inflation to the bank’s target of 2 percent.

Abe also said the govern-ment would continue to work with the central bank to boost growth, so that he could declare an official end to deflation at the earliest date possible.

“Governor Kuroda has met my expectations with job availability at a 43-year high,” Abe said on public broad-caster NHK. “I want him to keep up his efforts. But I haven’t made up my mind,” on who should succeed Kuroda when his term ends in April, he added.

Many analysts see a good chance that Kuroda will be reappointed when the gov-ernment selects successors to him and his two deputies in coming months, decisions that need parliament’s approval.

Abe said Japan’s economy was showing signs of emerging from deflation, with a tightening job market pushing up wages.

“We’ll deploy all available policies so that we can declare an end to deflation at the earliest date possible,” Abe said. “It might not neces-sarily be this year, but the government and the BOJ must fulfill their responsibilities,” he added, so as to ensure con-ditions to bring about an end to deflation.

The government looks at several factors, such as infla-tion data and the output gap, in determining whether the economy is sustainably out of deflation. Some policymakers are keen to declare an end to deflation, which would help Abe argue his policies suc-ceeded in reflating the economy. But doing so could also give the BOJ justification to withdraw crisis-mode stimulus.

Minimum wage hikes not enough to boost broader US salariesAFP

WASHINGTON: Hikes in the minimum wage take effect this week in about 40 US states and municipalities but they will not be enough to boost US salaries more broadly, economists say.

Congress has not approved a federal minimum wage hike since 2009, and it was not indexed to inflation, so state and local governments stepped in to help workers on the lowest end of the pay scale make up some lost ground.

Washington state’s min-imum wage will rise to $11.50 an hour, the highest in any state, while some are phasing in increases to get to a “living wage” of $15, compared with the federal minimum of $7.25.

In all, 18 states and nearly two dozen municipalities are raising their base salaries, but economists say the move affects a relatively small segment of the American labor force.

They say policies that could have a broader impact on wages include direct employment pro-grams, like infrastructure projects, especially in regions of the country that have not yet recovered from the recession.

An expanded earned-income tax credit which would boost earnings for higher-wage workers could also help, they say.

Other policies unrelated to wages include standardizing state licensing criteria for pro-fessions like hair dressers. This would allow professionals to move to areas with more vibrant economies without having to pay to fulfill new licensing requirements.

Another more technical change would be to clamp down on the use of non-compete clauses which firms increasingly include in employment con-tracts. Such clauses keep workers from moving to com-petitors or starting their own businesses.

Even with the US economy in its eighth year of recovery, and with solid hiring pushing the unemployment rate to a 17-year low of 4.1 percent, wage gains have been far more slug-gish than economists and poli-cymakers expected.

The gains have not been widely shared, either.

The US final employment report for 2017 released Friday showed average hourly

earnings increased 2.5 percent to $25.63, just ahead of con-sumer price increases.

Nominal wage growth since late 2009 has been just above two percent which is a little faster than inflation, but slower than the increases of more than three percent in previous recoveries.

“That’s the big open ques-tion... why haven’t we seen more wage growth?” said Roberto Pinheiro, senior research econ-omist at the Cleveland Federal Reserve Bank.

And recent gains have been marked by “rising inequality” with much of the growth “con-centrated at the top,” according to a study led by Jay Shambaugh at the Brookings Institution.

From 1979 to 2016, wages in the top fifth grew 27 percent,

compared to a gain of just 12 percent in the next quintile, and a one percent drop for the bottom group, the study shows.

Pinheiro attributed the low wage growth mostly to slow improvement in labor produc-tivity in the wake of the Great Recession that followed the 2008 financial crisis.

In other words, “firms are not getting more in output per hour from workers,” so “the pie is not growing,” he told AFP.

He and other economists agree there are many factors behind this, and as a result there is no easy solution.

Some of the slow wage gains are due to demographics in an aging American workforce: older, higher-paid workers are retiring -- the so called baby boomers -- replaced by younger, lower-paid “millen-nials,” which drags down average wages.

Some areas, mostly near major cities, are booming, and companies say they had to boost wages and offer more attractive working conditions to fill open positions.

But Jared Bernstein of the Center on Budget and Policy Priorities, who served as chief

economic adviser to former Vice President Joe Biden, noted the US economy still has “pockets of geographic weakness.”

Those areas could benefit most from infrastructure projects to create jobs directly and help them catch up to more prosperous regions.

Bernstein also said compa-nies “have seriously gotten out of the habit” of raising wages, and executives have used holding down labor costs as a way to boost profits amid slow revenue growth.

Shambaugh agreed, telling AFP firms will need to “retrain themselves to offer above-market wages to steal people because there isn’t a deep bench.”

The economists called for policies to address declining innovation, in part caused by increasing concentration of industries; and the erosion of workers’ ability to negotiate higher pay, due to sharp declines in union membership, and the rise of non-compete clauses.

Most economists expect to see the unemployment rate fall much lower this year, and to see wages accelerate.

VW 2017 group sales rose to around 10.7 million carsREUTERS

BERLIN: Volkswagen group sales probably rose to around 10.7 million cars last year and kept the German behemoth ahead of Toyota as the world’s largest automaker, Bild am Sonntag reported, citing in-house VW estimates.

Higher delivery figures across the group, which includes premium brands Audi and

Porsche, helped drive revenue above 220 billion euros ($264.62 billion) for the first time ever after the 2016 record of 217 bil-lion euros, the newspaper said on Sunday. A spokesman at Wolfsburg-based VW declined comment on the report. VW is due to publish official 2017 group sales data on Jan. 17 and will release core financial results in late February.

In 2016, the first full year

after VW’s emissions test-cheating “Dieselgate” scandal, group sales rose 3.8 percent to a record 10.3 million cars, helped by a double-digit increase in China and gains in Europe.

Toyota said last month it expected to sell 10.35 million cars worldwide in 2017 across its Toyota, Lexus, Daihatsu and Hino brands, up 2 percent from 2016, and 10.5 million this year.

Most economists expect to see the US unemployment rate fall much lower this year, and to see wages accelerate.

New Volkswagen vehicles are seen at a parking lot of the VW factory in Sao Bernardo do Campo, Brazil, on Friday.

26 MONDAY 8 JANUARY 2018BUSINESS

White House doesn’t see need for faster Federal Reserve hikes due to tax cut

BLOOMBERG

WASHINGTON: The Federal Reserve won’t need to pick up the pace of its planned interest-rate increases in response to the recently-passed tax overhaul package, White House chief economist Kevin Hassett said.

The administration’s com-puter modeling of the economic effects of the tax plan result in interest rates that “aren’t incon-sistent with the Fed’s current guidance,’’ he said during a Jan. 6 session at the annual meeting of the American Economic Asso-ciation in Philadelphia.

US central bankers in December penciled in three interest-rate increases for this year, the same pace they fore-saw in September, even as they raised their forecast of 2018 eco-nomic growth to 2.5 percent from 2.1 percent in anticipation of the $1.5 trillion cut in business and household taxes, based on their median projections. Pres-ident Donald Trump signed the tax bill into law on December. 22.

“If you have a supply side stimulus then it doesn’t put upward pressure on prices’’ and so doesn’t require a change in the Fed’s policy path, Hassett

said. While there’s some boost to demand from the plan, pri-marily through household tax breaks, the lower corporate tax rate should pave the way for higher potential growth by encouraging companies to spend more on productivity-enhanc-ing plant and equipment, Hassett said, echoing comments he made in a November 16 Bloomb-erg interview.

The White House economist also pointed to the tepid level of inflation, which is below the Fed’s 2 percent target, in sug-gesting that the tax cuts would not lead to a faster pace of cen-tral bank rate increases.

Monetary policy makers attending the annual economists’ meeting provided differing

views of the tax plan and its potential impact on the economy and monetary policy.

James Bullard, president of the Federal Reserve Bank of St. Louis, said he wouldn’t be sur-prised if the tax reforms yielded a longer-term payoff for the economy.

“There is some possibility this could light a fire under investment and really drive growth higher,” Bullard, a pol-icy dove who’s argued against raising rates, said in an interview on Bloomberg Television with Michael McKee on January 5. “I have some sympathy for this idea you would get this invest-ment boom coming out of this tax policy.”

While Bullard said that thus far, he hadn’t changed his call for the Fed to keep rates on hold for now, “if that happens I would certainly take note of that and adjust policy appropriately.”

Federal Reserve Bank of Philadelphia President Patrick Harker, in contrast, said he didn’t expect the package of tax cuts to have a large impact on economic growth.

In remarks on Jan. 5 at the AEA meeting, Harker also revealed a dovish rate call for 2018: two hikes, versus the

median Fed estimate from December of three increases, because inflation was low and he was concerned by the risk of inverting the yield curve.

While the central bank will need to keep watch on the demand-side effects of the tax cuts, “I wouldn’t see much need for the Fed to do anything differ-ent” than already planned, said Glenn Hubbard, who served as head of the Council of Economic Advisers under President George W. Bush.

“The only thing it might say to the Fed is that it’s OK to keep’’ raising rates, said Hubbard, who’s now a professor at Colum-bia University in New York.

Former Bank of England pol-icy maker Kristin Forbes (pictured) said the Fed would probably have to pick up the pace of its rate hikes. but added that any speed-up would be from what has been a historically very slow tightening campaign.

The “pace might accelerate a bit but it doesn’t mean we’re pushing any rate hikes into an uncharted, much faster terri-tory,’’ Forbes, who’s now a professor at the Massachusetts Institute of Technology, said at the economists’ annual meeting.

Winning run extends to first week of 2018BLOOMBERG

SINGAPORE: Emerging-market assets extended last year’s winning streak to the first week of 2018 as a weak dollar, low global yields and optimism over global growth boosted demand for developing-nation stocks and bonds.

The MSCI Emerging Mar-kets Index of equities climbed 3.8 percent this week, its best performance since July, while the MSCI Emerging Markets Currency Index gained 0.9 per-cent. A Bloomberg Barclays index tracking the EM local-currency government bonds had its best week in almost six months.

The Colombian peso was the best-performing currency during the week, rising 2.8 percent against the dollar, on the back of higher oil prices

North Korea accepted a proposal to hold talks with South Korea on Jan. 9 aimed at reducing tensions ahead of the Winter Olympics next month. Gains in the won, which reached a three-year

high in the week, were partly driven by signs of an easing of tension between the two neighbors

Foreign funds piled into South Korean and Taiwanese stocks, buying more than a net $2bn of equities from the two markets MSCI’s emerging-market currency index extended an 11-day winning streak, up more than 20 per-cent from Jan. 2016 low.

While China’s official PMI reading held up, purchasing manager indexes for manufac-turing in Indonesia, Malaysia and South Korea dipped below 50, the dividing line between expansion and contraction, during December.

South Korea’s central bank said it will take action if there are excessive one-sided cur-rency moves.

Philippines’s new tax law is expected to raise the infla-tion rate by 0.4-0.7 percentage points during the first year of implementation, with the impact tapering over time, President Duterte’s spokesman Harry Roque said.

QATAR STOCK EXCHANGE

QE Index 8,751.20 1.40 %

QE Total Return Index 14,675.25 1.40 %

QE Al Rayan Islamic Index 3,561.95 1.70 %

QE All Share Index 2,504.66 1.24 %

QE All Share Banks &

Financial Services 2,749.32 1.59 %

QE All Share Industrials 2,662.49 0.38 %

QE All Share Transportation 1,849.34 1.40 %

QE All Share Real Estate 1,945.27 2.41 %

QE All Share Insurance 3,475.47 1.13 %

QE All Share Telecoms 1,122.29 0.90 %

QE All Share Consumer

Goods & Services 5,109.86 1.34 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

07-01-2018Index 8,751.20

Change 120.53

% 1.40

YTD% 2.67

Volume 7,956,985

Value (QAR) 203,522,736.66

Trades 3,567

Up 32 | Down 09 | Unchanged 104-01-2018Index 8,630.67

Change 22.36

% 0.26

YTD% 1.26

Volume 8,705,550

Value (QAR) 236,613,705.06

Trades 3,983

EXCHANGE RATE

GOLD QR154.2037 per grammeSILVER QR2.0131 per gramme

Index Day’s Close Pt Chg % Chg Year High Year Low

All Ordinaries 6175.3 9.3 0.15 6177.4 6141.4

CAC 40 Index/D 5306.9 18.3 0.35 5318.74 5258.66

DJ Indu Average 24824.01 104.79 0.42 0 0

Hang Seng Inde/D 30560.95 45.64 0.15 30515.31 30028.29

Iseq Overall/D 7059.55 5 0.07 7061.56 7021.69

Kse 100 Inx/D 41544.27 57.4 0.14 41566.76 40169.62

S&P 500 Index/D 2695.81 22.2 0.830338 0 0

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.904 QR 4.9729

Euro QR 4.3632 QR 4.4242

CA$ QR 2.8829 QR 2.9398

Swiss Fr QR 3.7113 QR 3.7637

Yen QR 0.03207 QR 0.03269

Aus$ QR 2.8339 QR 2.8892

Ind Re QR 0.0569 QR 0.058

Pak Re QR 0.0325 QR 0.0333

Peso QR 0.0724 QR 0.0738

SL Re QR 0.0235 QR 0.0240

Taka QR 0.0437 QR 0.0445

Nep Re QR 0.0355 QR 0.0362

SA Rand QR 0.2937 QR 0.2996

It may be the trickiest job to fill in central banking. And as the Federal Reserve Bank of New York search committee casts a wide net to find a replacement for its outgoing president, William

Dudley, the wish list is getting long.Interviews with 10 members of the Fed’s advisory

boards, which the committee is consulting, suggest they want a president with market expertise, crisis-management chops, strong leadership abilities, an eye on inequality and an ear for regional trends.

The jury is out on whether he or she should be an economist, even though the New York Fed president traditionally plays a big role in guiding US monetary policy. Some advisers are pushing for a woman or a minority and one of the search firms hired by the committee is focusing on just such picks.

It’s a powerful position so the stakes are high, and the appointment will come amid broader changes in Fed leadership. Jerome Powell has been nominated

to replace Janet Yellen as chairman in February and the vice chair slot is vacant.

The New York president has a permanent vote on monetary policy, elevating the appointee relative to the other 11 regional Fed bank presidents, who vote on a rotating basis. The person oversees both big bank supervision and market operations that manage the Fed’s policy rates and balance sheet, which it is carefully shrinking. And beyond that, the job entails keeping close tabs on the region’s diverse economy.

“I’m hoping for someone who is as sensitive to information that’s non-

conventional, non-traditional, as Bill Dudley was,” said Joseph Carbone, chief executive at The WorkPlace, a workforce development agency, and a member of the bank’s Community Advisory Group. “I want someone who’s going to be willing to look deeply into the numbers and spend as much time talking about the forgotten population.”

Carbone sits on one of four advisory groups that the search committee has already canvassed, based on the minutes from their meetings. The search’s leaders have been explaining the process, soliciting suggestions and asking advisers to name possible candidates, based on members’ accounts.

The committee hasn’t publicized a long list, but Peter Blair Henry -- outgoing dean of New York University’s Stern School of Business -- has been suggested, according to advisory board members. New York Fed insider Simon Potter, who runs its markets group, Brian Sack, who previously held that position, and former senior Fed Board staffer Nellie Liang have also been discussed as potential candidates.

In addition, former Treasury economist Karen Dynan has been floated, as has Northwestern University economist Janice Eberly, JPMorgan Chase’s Sandra O’Connor, and UBS Securities economist Seth Carpenter.

The New York Fed says on its website the process is expected to take six to nine months. Dudley plans to retire in mid-2018.

Fed makes rounds, takes names in search for next chief

Fannie-Freddie overhaul might mint hedge fund riches� losses

JEANNA SMIALEKBLOOMBERG

JOE LIGHT

BLOOMBERG

THEY’VE been rebuffed by government agencies.

Now� the fates of hedge funds and other investors in

mortgage-finance giants Fannie Mae and Freddie Mac could lie with an old adversary: Congress.

Whether shareholders make a killing or get wiped out might hinge on a yet-to-be written provision of a draft Senate bill that marks lawmakers’ latest attempt to overhaul Fannie and Freddie� which have been wards of the state for almost a decade.

The section currently reads “open pending further discussion� “ said people familiar with the matter.

It’s meant to deal with the bailout agreements that rescued the companies during the depths of the 2008 financial crisis� including addressing the fact that the Treasury Department owns almost $200bn in senior preferred stock.

If the government relinquishes all or a portion of that money� profits could flow to investors who’ve sunk billions of dollars into Fannie and Freddie� including some of the biggest names in finance such as John Paulson� Bruce Berkowitz and Blackstone Group.

In 2014� the last time senators tried to pass legislation� lawmakers said shareholders would likely be left with nothing.

This time things could be different.The authors of the latest bill�

Tennessee Republican Bob Corker and Virginia Democrat Mark Warner� are considering a proposal that could make investors in preferred shares whole or close to it� while owners of common shares could fare worse� said people familiar with the lawmakers’ thinking who asked not to be named because the legislation is still being drafted.

The people said whether and how shareholders get compensated in the transition to the new system is still an

open question.And some

political analysts have said it will be difficult to pass any housing-finance bill in 2018 given that it’s an election year� such an effort would likely require 60 votes in the Senate and lawmakers are distracted by other issues such as funding the government.

What happens to Fannie and

Freddie isn’t just important to hedge funds� but also critical to the US housing market.

The companies guarantee nearly $5 trillion in mortgage bonds� which keeps borrowing costs low and helps make home loans readily available.

They’ve been under government control since 2008� and determining

what to do with them is perhaps the biggest remaining overhang from the financial crisis.

The draft proposal being worked on in the Senate technically kills Fannie and Freddie� even as it preserves their core operations of buying mortgages from lenders and securitizing them� the people said.

The Federal Housing Finance Agency� which controls Fannie and Freddie� would direct the companies to sell or transfer their assets and then put them in receivership� the people said.

In a receivership� funds are available to common shareholders only after covering more senior claims� such as the FHFA’s expenses as a receiver� the government’s securities and preferred shareholders.

The Treasury owns warrants to acquire nearly 80 percent of the companies’ common stock and owns $195.5bn in senior preferred shares.

Outside investors in preferred shares have included Paulson & Co� Berkowitz’s Fairholme Funds and Blackstone� while common investors include Bill Ackman’s Pershing Square Capital Management.

Corker and Warner’s plan would form successor companies to Fannie and Freddie that would raise new capital and be freed from government control once new competitors entered the mortgage-finance market.

The lawmakers would also repeal the old firms’ federal charters and forbid future entities from calling themselves Fannie Mae or Freddie Mac� a ritual sacrifice that could appease hard-line Republicans who’ve long wanted the companies eviscerated.

Spokeswomen for Corker and Warner declined to comment.

Chris Gamaitoni and Isaac Boltansky� analysts for Compass Point Research & Trading� said they continue to believe that “persistent policy and political headwinds” put the odds of the current Congress passing legislation at about 10 percent.

“But the evolution of the conversation on Capitol Hill is critical as it will shape the next iteration of the reform conversation� “ they wrote in a Thursday research note.

Acrimony between investors and the

government has built over the past several years� particularly after the Obama administration revised the terms of their bailout agreements in 2012.

Initially� the companies had to pay a 10 percent dividend to the Treasury.

But more than five years ago� the government altered that arrangement to sweep nearly all of the companies’ profits.

The Treasury Department at the time said the change would hasten their wind-down and help conserve Fannie and Freddie’s remaining bailout funds.

Fairholme� Perry Capital and other investors sued Treasury and the FHFA� arguing that they were entitled to some of the companies’ profits.

Some investors� including Paulson� also worked with public relations and lobbying firms to press their cases to politicians on Capitol Hill.

When senators -- including Corker and Warner -- attempted to pass a bill to wind down and replace Fannie and Freddie in 2013 and 2014� the investors stepped up their campaign.

The 60-Plus Association� which said it was advocating on behalf of pensions and retirees� bought ads in key senators’ states� equating the bill to “Obamacare” for mortgages.

Corker became one of the shareholders’ top targets after saying at the time that any legislation would probably leave investors with nothing.

A bill passed the Senate Banking Committee in May 2014� but never received a floor vote.

Still� the investors’ campaign didn’t end. Some shareholders hired private investigators to dig up dirt on their perceived enemies.

Others funded payments to advocacy groups� college professors and nominally independent experts in exchange for publicly supporting their cause in opinion columns.

In the meantime� while investors have received documents through discovery that they said bolstered their lawsuits� every court to rule so far has dismissed their cases.

FHFA Director Mel Watt� whose term ends in 2019� has also rebuffed calls to release Fannie and Freddie from government control.

A boom in asset-backed securities issued by micro-lenders aiming to expand in China’s

fast-growing online credit market looks set to slow this year amid growing regulatory scrutiny.

Micro-lenders have raised billions of dollars packaging con-sumer loans into securities for sale to institutional investors on China’s nascent market for asset-backed securities in order to rapidly expand their loan books.

Many of China’s largest inter-net and technology companies have issued securities backed by micro-loans.

Ant Financial Services Group� an affiliate of Alibaba Group Holding�

dominates the market and the finance arms of JD.com Inc�

Baidu Inc� VIPShop Holdings and Xiaomi Technology have also raised funds through the products.

But the market for the secu-rities is set to slow this year�

industry sources say� as reg-ulators target lenders’ high debt levels and limited asset disclosure.

Rules announced on Dece-mebr 1 limited the amount of lending backed by the products the companies can make.

They were also required to consolidate them on their bal-ance sheets.

China’s exchanges and the National Association of Financial Market Institutional Investors (NAFMII) have suspended the issuance of securities backed by consumer loans by Internet-based micro-lenders� said Guo Yonggang� general manager of the structured financing depart-ment at Golden Credit Rating International Co.

NAFMII last week amended its disclosure requirements for consumer loan securities to reflect the central bank’s higher transparency standards.

The volume of securities backed by consumer loans has surged over 35-fold in the last two years� with the proceeds used to finance loans to individuals looking to buy the latest iPhone or finance overseas holidays.

About 489.4 billion yuan ($75.36bn) of the securities were issued in 2017� compared with 98.9 billion yuan in 2016�

according to China Securiti-sation Analytics.

Repackaging the loans as asset-backed securities has allowed lenders to transfer the loans off their balance sheets�

bypassing government rules stipulating how much they can lend in proportion to their equity capital.

Ant Financial is the largest issuer of consumer loan

securities� accounting for 60 per-cent of all issues in 2017�

according to Reuters calcu-lations based on data from China Securitisation Analytics.

Its two Chongqing-based micro-loan companies had total net capital of 10.6 billion yuan� but issued 265.1 billion yuan in loans by the end of June� accord-ing to CIB Research� a unit of Industrial Bank Co.

Outstanding loan securities issued by the two units have exceeded 250 billion yuan� it said.

“The ratio of total financing to total capital is far beyond the 2.3-times leverage requirement set by the Chongqing banking regulator� “ CIB Research said in a December report. As Beijing issued its new rules� Ant Finan-cial has quietly withdrawn plans to issue asset-backed notes worth billions of dollars� two sources with knowledge of the matter told Reuters.

Officials from the People’s

Bank of China have met with Ant Financial to discuss the high debt levels of its consumer finance business� said one of the sources.rage level.

Consumer loan securitisation boom put on hold as China changes policySHU ZHANG AND ELIAS GLENN REUTERS

Interviews with 10 members of the Fed’s advisory boards, which the committee is consulting, suggest they want a president with market expertise, crisis-management chops, strong leadership abilities.

Micro-lenders have raised billions of dollars packaging consumer loans into securities for sale to institutional investors on China’s nascent market for asset-backed securities.

If the government relinquishes all or a portion of that money� profits could flow to investors who’ve sunk billions of dollars into Fannie and Freddie� including some of the biggest names in finance.

About 489.4 billion yuan ($75.36bn) of the securities were issued in 2017� compared with 98.9 billion yuan in 2016�according to China Securitisation Analytics.

27MONDAY 8 JANUARY 2018 BUSINESS

Senator Bob Corker, a Republican from Tennessee, being interviewed by journalists in the basement of the US Capitol in Washington DC in this file photo.

28 MONDAY 8 JANUARY 2018

INsightback to BUSINESS

CAPITALCOMMENT

If you have a supply side stimulus then it doesn’t put

upward pressure on prices and so doesn’t require a change in

the Fed’s policy path.Kevin Hassett, Chief Economist, White House.

NAME IN THE MARKET: DEMOGRAPHIC DIVIDEND

Officials from the US and South Korea said further talks were needed to revise their free-trade pact, a negotiation straining ties between the allies as they

grapple with Kim Jong Un’s growing nuclear-weapons threat.

The US presented proposals to improve auto exports and lift trade barriers during a meeting with South Korea coun-terparts Friday in Washington, Trade Representative Robert Lighthizer said in a statement. While both sides agreed to hold more talks soon, South Korea’s top negotiator, Yoo Myung-hee, said afterward that “the negotiation is not easy,” according to Yonhap News.

“We have much work to do to reach an agreement that serves the economic interests of the American people,” Lighthizer said. “We must achieve fair and reciprocal trade between our two nations.”

US President Donald Trump, who has abandoned or reopened trade talks with numerous nations since taking office last year, has blamed the five-year-old pact known as Korus for doubling Ameri-ca’s trade deficit with South Korea. He has pressed ahead with efforts to revise the deal, even while seeking solidarity from President Moon Jae-in against North Korea’s nuclear provocations.

The talks Friday repre-sented the first round of Korus negotiations since the US in July invoked a clause in the accord that enables either side to seek amendments. South

Korea “responded actively” to the US while proposing its own changes to investor-state dispute settlement rules and trade remedies, the country’s trade ministry said in a statement, without giving details.

So far, Trump hasn’t notified lawmakers that he plans to seek their approval under a law that gives the president authority to “fast track” trade deals through Congress.

Since Trump wasn’t seeking congressional approval, the US would probably propose narrow changes to the agree-ment, such as amendments to tariffs or the rules of origin that set content requirements for products, said Troy Stangarone, senior director of congressional affairs and trade at the Korea Economic Institute of America in Washington. Stangarone said trade in autos was likely to be a major focus of talks, given the US’s $18.8bn vehicle trade gap with South Korea.

The US overall deficit in goods with South Korea nar-rowed to $21.6bn in the 11 months through November, down 18 percent from the same period a year earlier, according to US data released Friday.

The US is South Korea’s second-largest trading partner and the push to alter the deal comes at a difficult time for Seoul. Thwarting the risk from North Korea has risen in prominence on Trump’s agenda since he took office, and overshadowed trade during his November trip to Asia. In South Korea, he discussed both topics in a meeting with Moon.

US sees `much work’ to revising South Korea free-trade pact SEOUL/ BLOOMBERG

The talks Friday represented the first round of Korus negotiations since the US in July invoked a clause in the accord that enables either side to seek amendments.

REUTERS

NEW York: Gun violence in major US cities fell in 2017 as police used the latest crime-fighting software combined with a revival of old-fashioned community policing to build trust with a skeptical public.

Law enforcement officials and criminologists credit that dual approach with helping extend the decades-long reduc-tion in crime in New York City and reducing gun violence in Chi-cago by 20 percent in 2017.

Crime has dropped precipi-tously across the United States since peaking in 1991, though some cities have lagged and oth-ers have experienced sudden spikes.

Chicago became a symbol of US gun violence after homicides soared nearly 60 percent in 2016, drawing frequent criticism from Donald Trump during his cam-paign for the presidency and after he was elected.

Since then, the third-largest US city has revamped policing policies and developed a sophis-ticated integration of crime-fighting software and hardware such as cameras. It has also built ties to the public through events such as a

Halloween party that drew 500 kids to a police station in a high-crime district.

While there is no hard evi-dence that those initiatives were responsible, homicides in Chi-cago dropped 16 percent in 2017 to 650. That still outnumbered homicides in the two largest US cities, New York and Los Ange-les, combined.

“There was a promise to never relive 2016,” said Anthony Guglielmi, chief communications officer for Chicago police. “That was a moment in time we never want to repeat in terms of violence.”

While Chicago has seen vol-atile swings, New York has experienced a consistent reduc-tion in crime, in sharp contrast with a bygone reputation as the country’s murder and mayhem capital.

On Friday the New York Police Department reported 290 murders in 2017, down 13 per-cent from 2016 and 87 percent from 1990, when a record 2,262 people were killed.

The New York Police Depart-ment called 2017 the safest year in nearly seven decades even as arrests decreased by nearly 400 per day from their high point seven years ago.

Experts do not entirely understand the trend but point to a number of likely factors, including CompStat, the compu-ter analysis of crime data that was developed by New York police in 1994 and has since been replicated in other cities.

CompStat gives police daily reports on how they are perform-ing, enabling them to quickly identify trends and deploy offic-ers to trouble spots.

Data-driven, evidence-based policing has advanced further with the help of crime-predict-ing software like HunchLab and gunfire-detection system ShotSpotter.

Technology “helps us to link cases quicker, deploy faster and deploy smarter,” Dermot Shea, the NYPD’s chief of crime con-trol strategies, told a news conference on Friday.

The public uproar over police shootings of unarmed black men across the United States in recent years has also convinced police they must adopt neighborhood or community policing.

That aims to improve rela-tionships between police and residents of high-crime districts and reduce animosity toward police to gain more co-operation in solving and preventing crimes.

“Technology is great ... but I think the best thing going for us is the ability for the police offic-ers to establish and have relationships with the people in this great city,” New York Police Commissioner James O’Neill said.

Chicago studied the best practices of the New York and Los Angeles police departments, incorporating much of New York’s neighborhood policing model and the use of predictive crime software by Los Angeles.

In February, Chicago rolled out so-called Strategic Decision Support Centers, which integrate gunfire detection and predictive crime software with the city’s extensive network of cameras. Before year’s end the centers had expanded to six of the city’s 22 districts.

The program started in noto-riously high crime districts such as Englewood and Harrison, where police said crime fell by 43 percent and 26 percent, respectively, in 2017.

Now, when a trigger is pulled, Chicago police are alerted within 30 seconds by ShotSpotter, and the informa-tion is relayed to the smartphones of patrol officers within a minute, Guglielmi said.

Crime fighting goes digital

Kushner’s family is said to get subpoenas over use of visa programBLOOMBERG

NEW YORK: US regulators and prosecutors have requested information from the real estate development business run by Jared Kushner’s family over a program that allows wealthy foreigners to obtain visas for investing in American projects, said two people with direct knowledge of the matter.

The Securities and Exchange Commission and prosecutors for New York’s Eastern District issued subpoenas to Kushner Cos. last May seeking details about its use of what’s known as the EB-5 program, according to the people, who asked not to be named because the requests weren’t public.

Jared Kushner (pictured) is a senior adviser to President Donald Trump and is married to Trump’s daughter Ivanka. He

was chief executive officer of Kushner Cos. until he stepped down and divested some of his investments to family members when he joined the administration.

SEC spokeswoman Judith Burns didn’t immediately return an email seeking comment. John Marzulli, a spokesman for the Eastern District of New York, declined to comment.

It couldn’t be determined what the SEC is reviewing, and the agency hasn’t accused Kush-ner Cos. of any wrongdoing. The SEC subpoena was reported ear-lier Saturday by the Wall Street Journal, which published a story in August on the subpoena issued by New York’s Eastern District.

Last year, Kushner’s sister, Nicole Meyer, touted her broth-er’s White House role as she urged Chinese investors to fund a New Jersey development

through the EB-5 program.EB-5 offers foreigners green

cards in exchange for investing $500,000 in certain US busi-nesses that create at least 10 jobs per investor.

While Kushner Cos. isn’t publicly traded, the SEC has oversight of EB-5 because the investments can be deemed securities transactions under federal laws.